KUSHAL VINODKUMAR BHATT LEGAL HEIR OF LATE SHRI VINODKUMAR RAMANLAL BHATT,ANAND vs. THE ACIT (OSD), WARD-5, ANAND

ORDER \nPER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-\nThis appeal is filed by the Legal Heir of the Assessee as against the appellate order dated 30.01.2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the exparte re-assessment order passed under Section 147 r.w.s.144 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') relating to the Assessment Year 2011-12.\nI.T.A No. 752/Ahd/2025 Α.Υ. 2011-12\nKushal Vinodkumar Bhatt Legal Heir of Late Shri Vinodkumar Ramanlal Bhatt. vs. ACIT\nPage No\n2\n2. The registry has noted that there is delay of 96 days in filing the above appeal. The Legal Heir of the assessee filed a Notarized Affidavit stating that extensive discussions with Chartered Accountant on filing the above appeal on his deceased father name since it was setaside back to AO for de-nova assessment. More particularly, when the reopening notice u/s.148 was issued on a deceased person. This has caused the delay in filing the appeal with a delay of 9 days and thereby requested to condone the delay in filing the appeal. Ld. Sr. D.R. appearing for the Revenue has no objection in condoning the delay thus the delay of 9 days in filing the above appeal is hereby condoned.\n3. Brief facts of the case is that the assessee herein Mr. Vinod Kumar Bhatt was an individual and passed away on 11-02-2011. The assessee sold immovable properties amounting to Rs.1,21,31,000/- on 26-08-2010 relevant to the Asst. Year 2011-12. However, the assessee has not filed Return of Income declaring the capital gain on sale of properties, which has escaped assessment. Therefore, the assessment was reopened by issuing notice u/s.148 dated 27-03-2018 in the name of the dead person Shri Kushal Vinodkumar Bhatt which was duly served by Post. However, there was no response from the assessee. Therefore the A.O. issued notices u/s.142(1) of the Act. In response the deceased assessee's son informed that the Assessing Officer the death of his father by producing copy of the death certificate and also informed he does not know the various transactions carried out by his deceased father. The Assessing Officer called for information u/s.133(6)\nI.T.A No. 752/Ahd/2025 Α.Υ. 2011-12\nKushal Vinodkumar Bhatt Legal Heir of Late Shri Vinodkumar Ramanlal Bhatt. vs. ACIT\nPage No\n3\nfrom the Sub-Registrar, Anand and held that the Sale Deed bearing registration No. 8472 and 8473 of 2010 dated 26.08.2010 were signed by the Son in the capacity of Second party with others as Legal Representative of the assessee. Therefore, AO proceeded with the reassessment and taxed the entire sale consideration of Rs.1,21,31,000/- as the assessed income of the assessee and demanded tax thereon. Thus, the AO mentioned in the assessment order Late Vinodkumar Ramanlal Bhatt Legal Heir: Kushal Vinod Bhatt.\n4. Aggrieved against the reassessment order, assessee filed an appeal before Ld. CIT(A) with some delay which was condoned. The legal heir contented before CIT[A] that the reassessment order passed under Section 144 r.w.s.147 for A.Y. 2011-12 is void ab initio. Since the notice issued under Section 148, which confers jurisdiction for reassessment, was issued in the name of a deceased person, consequently the entire proceedings legally unsustainable. Despite being informed of the death of the assessee, the Ld AO failed to issue a fresh notice to the legal heir, violating Section 159(2)(b) of the Act. The legal heir never participated in the reassessment proceedings but merely requested the AO to drop the case due to the jurisdictional defect. Further, the delay in filing the appeal arose due to the need to register the appellant's PAN as a legal heir, a process that was only completed on 06.03.2019.\n5. Ld CIT[A] considered the submissions of the assessee however held that since the reassessment order being an exparte order, Ld.\nCIT(A) set aside the matter back to the file of Assessing Officer to make fresh assessment.\n6. Aggrieved against the appellate order, the assesses is in appeal before us raising the following Grounds of Appeal:\n1. The National Faceless Appeal Centre (NFAC) has erred in law and in facts in not annulling the assessment order passed in the name of a deceased person in toto, despite the fact that the Assessing Officer was informed about the death of the assessee and no fresh notice u/s 148 was issued to the legal heir.\n2. The National Faceless Appeal Centre (NFAC) has erred in law and in facts in setting aside the matter back to the Assessing Officer to examine various grounds raised by the legal heir when the Assessing officer does not have jurisdiction to pass the assessment order.\n3. The appellant further reserves its right to add, alter, amend or modify any of the aforesaid grounds before or at the time of hearing of an appeal.\n7. Ld. Counsel Mr. Bandish Soparkar appearing for the legal heir of the assessee submitted that the reopening notice u/s.148 was issued on 27-03-2018 in the name of deceased assessee. Hence the very jurisdiction for the reassessment itself is bad in law. The Legal heir duty bound informed the Assessing Officer the death of the assessee, however the AO without issuing fresh reopening notice, proceeded with the reassessment by impleading the legal heir in the reassessment order is not permissible in law and relied upon following case laws and others:\nI.T.A No. 752/Ahd/2025 Α.Υ. 2011-12\nKushal Vinodkumar Bhatt Legal Heir of Late Shri Vinodkumar Ramanlal Bhatt. vs. ACIT\nPage No\n5\nS No\nParticulars\nCitation\n01\nBhupendra Bhikhalal Desai\n131 taxmann.com

1. In this case the notice u/s.148 was issued in the name of a deceased person, as per the information available with the department. When the legal heir informed the AO about the death of the assessee and requested to issue fresh notice for reassessment, but the Ld AO proceeded with the reassessment and taxed the entire sale consideration of Rs.1,21,31,000/- as the assessed income of the assessee and treated the son as the legal heir and passed exparte order. Thus the AO is not justified in proceeding with the notice issued u/s.148 on a dead person and also taxing the entire sale consideration as the assessed income of the assessee, consequently the entire reassessment proceedings are legally unsustainable. Thus, the provisions of Section 292B does not cure a jurisdictional defect, and provisions of Section 292BB does not apply to legal heirs who have not participated in the reassessment proceedings. Furthermore, since no valid notice under Section 148 was issued to the legal heir within the limitation period u/s.149(1)(b) of the Act, the proceedings are time-barred. Therefore, the reassessment made in the name of a deceased person is void ab-initio and liable to be quashed.\n10. The above view of ours is supported by the judgement of the Hon'ble Supreme Court in the case of Bhupendra Bhikhalal Desai [cited supra] by dismissing the Department SLP as follows:\n“Section 153C of the Income-tax Act, 1961 Search and seizure Assessment of income of any other person (Validity of notice) Assessment years 2011-12 to 2017-18 Original assessee, namely 'B', passed away on 23-4-2017- Assessing Officer issued a notice under Section 153C in name of 'B' on 29-3-2019 After receiving said notice legal heir informed Assessing Officer that\n Α.Υ. 2011-12\nKushal Vinodkumar Bhatt Legal Heir of Late Shri Vinodkumar Ramanlal Bhatt. vs. ACIT\nPage No\n7\nhis father, B had passed away and requested to drop proceedings as notice was issued to a dead person Assessing Officer rejected objections raised by legal heir on ground that no information was provided about demise of B and even after his death income tax returns were filed in name of B for relevant assessment years High Court by impugned order held that impugned notice under Section 153C issued against dead person, is unenforceable in law and revenue could not contend that as they had no knowledge about death of assessee, they were entitled to plead that notice was not defective and, therefore, impugned notice as well as order were to be quashed and set aside Whether Special Leave petition filed against impugned order was to be dismissed Held, yes [Para 2] [In favour of assessee)\n10.

1. Further the Jurisdictional High Court in the case of Pravin Chandra A Shah vs. Union of India [cited supra] held that reopening notice u/s.148 issued upon deceased assessee was a nullity. Therefore, consequential proceedings and order passed thereon were liable to be quashed by observing as follows:\n"6.7 Having gone through the decisions referred to herein above, it is pertinent to note here that, in the case on hand, the Respondent-authorities initiated the proceedings, under Section 148 of the Act, against the dead person, i.e. late Ms. Shah, by issuing notice on 27-3-2021. Subsequently, an amendment in the Act came into force with effect from 1-4-2021. Under the circumstances, we are of the considered opinion that, if, any notice Is to be issued under Section 148 of the Act in post 1-4-2021 period, the procedure required under the amended Act was required to be followed.\n6.7.1 Here, it is pertinent to note that the notice was issued in the name of the present petitioner, who happens B to be the legal heir of the original assessee, i.e. late Ms. Shah. Thus, it becomes clear that, before issuing the notice to the present petitioner, the Respondent-authorities failed to comply with the provisions of the amended Act. It is not being disputed by the Respondent-authorities that the impugned order is also passed in the name of the dead person, i.e. late Ms. Shah, which is a\n Α.Υ. 2011-12\nKushal Vinodkumar Bhatt Legal Heir of Late Shri Vinodkumar Ramanlal Bhatt. vs. ACIT\nPage No\n8\nnullity. Under the circumstances, the provisions of Section 292B and 292BB of the Act shall not apply in the facts of the case on hand, as discussed herein above.\n6.7.2 Keeping in mind the ratio laid down by the Apex Court on the issue involved in this matter as well as the decisions of the other High Courts, we are of the view that the proceedings initiated by the Respondent authorities against a dead person, i.e. late Ms. Shah in this case, as well as the impugned orders passed by it deserves to be quashed and set aside.”\n10.